The Bitcoin market dropped a bit on Wednesday, as traders try to build momentum in a market that was left by huge numbers. However, institutions are starting to accumulate again.
BITCOIN
The Bitcoin market has seen an initial rally during the trading session, but it did give back gains on Wednesday as interest rates continued to skyrocket in the United States. That obviously is very negative for risk appetite, and risk appetite of course has a major influence on Bitcoin as it is fairly out there when it comes to the risk appetite spectrum.
That being said, it is worth noting that even though rates have been rising, the Bitcoin market has done fairly well, definitely better than one would expect. So, with that, I think you have to believe that Bitcoin has a real chance of rallying on short-term pullbacks.
Market Support and ETF Inflows
The 50-day EMA is sitting right around the 73,600 level and then underneath there we have some support at the 72,000 level. So, all things being equal, I do think this remains a buy on the dip type of scenario and I think you also need to understand that traders will continue to look at this as a market that although pretty risky, has been sold off so much on the way down here.
And at the same time, we've seen so many inflows into the ETFs that I think it makes perfect sense that eventually we continue to go higher. It's going to be noisy, it's not going to be easy, but I think ultimately we do have a situation where traders will take advantage of the idea that perhaps Bitcoin has seen the worst of the selling and that perhaps Bitcoin will become favored again, not only by institutions, but eventually retail traders as well.
Bitcoin has certainly paid its dues as of late and in this environment, I think that is a big deal. Looking at this chart, as long as we can stay above 72,000, I think I'm okay being a buyer.